Scarborough brings Far East finance to Manchester resi
Kevin McCabe's development company said it has entered into formal agreement with two Far East backers to unlock £600m of residential schemes in Manchester and Salford.
Scarborough Group International has entered into a joint venture with Top Spring International Holdings, a Hong Kong-listed real estate developer and Metro Holdings, a Singapore-listed property development and investment group.
The deals will fund the next phase of Milliners Wharf, the canalside development in New Islington, and Middlewood Locks, a 23.6-acre site near the old ITV Granada site next to the former Manchester Bolton & Bury Canal in Salford.
Top Spring and Metro are making their first investments in the UK real estate market and will each hold 25% of the joint venture, with Scarborough retaining the 50% balance. Scarborough has worked with both investors before on projects in China.
The deal is the latest in a line of eye-catching overseas financial agreements in Manchester, with Chinese money also pledged to deliver Airport City and Manchester City FC's Abu Dhabi owners behind last week's announcement of 6,000 homes in East Manchester.
Phase two of Scarborough's Milliners Wharf, which has a gross development value of £30m, to be called the Hat Box, will provide 144 apartments in an eight-storey building, on Ashton Canal. Construction is due to start in summer 2014 with completion expected during 2016.
Phase one of Milliners Wharf comprises 261 apartments and is almost fully sold at prices between £100,000 and £250,000 a unit.
Milliners Wharf is a former City Lofts site acquired by Scarborough in 2010 from Santander.
Middlewood Locks, which has a gross development value of £575m, is planned to contain 2,000 new homes along with mixed commercial uses including offices, shops, delis, restaurants, a convenience store, nursery and gym.
Scarborough said: "There will be a mix of apartments and houses available to help cater for a wide mix of occupiers from first time buyers, families to empty nesters. The homes will be designed in a way to make the most of the landscaping incorporating private and public spaces. Part of the landscaping strategy is to connect the green spaces with the canal, incorporate a woodland theme and an adventure playground to accommodate the new community.
"The site already has an outline planning consent for 2.6m sq ft of residential-led, mixed-use development, but an additional 2.6 acre section of the site acquired recently is expected to increase the gross development area, once outline planning consent has also been granted for this additional section. Over the course of 2014, Scarborough will be bringing forward its development plans to accommodate a start on site of phase 1, during the first half of 2015. "
Kevin McCabe, chairman of Scarborough, added: "I have known and worked with the directors and management teams of Top Spring and Metro for many years through Scarborough's extensive activities in China, and have the utmost respect for them.
"They are as excited as we are to be developing high-quality, new homes in one of the UK's most vibrant, cosmopolitan and progressive regions. There is very strong demand for housing in the central Manchester area and, as in many parts of the UK, a shortage of supply, so we are confident that both our projects will be well received".
Chun Hong Wong, chairman and chief executive of Top Spring, said: "We have worked extensively with Scarborough in the People's Republic of China, over the last 10 years, and are pleased to be continuing our partnership with them in the UK, along with Metro, to deliver two high-quality residential developments in an area of the UK where there is a shortage of good-quality housing supply."
Lt-Gen (Retd) Winston Choo Wee Leong, chairman of Metro Holdings, added: "These Manchester projects are Metro's first foray into the UK real estate market, and with the Manchester residential market being particularly dynamic, we are confident that this investment will be a huge success.
"We are extremely pleased to be partnering with the Scarborough Group, a long-term trusted partner of both Top Spring and Metro, and a respected and experienced developer."
